Special Coverage

DETROIT – Three possibilities are under consideration for Audi AG’s first North American vehicle assembly plant, Johan de Nysschen, head of Audi of America Inc., tells Ward’s, including acquiring an existing facility from another auto maker.

Other options include adding an assembly line at Volkswagen AG’s new plant under construction in Chattanooga, TN; or building a dedicated facility in a separate location.

Audi will decide midyear whether to add North American vehicle-building capacity, top-ranking U.S. executives say in interviews on the sidelines of the North American International Auto Show.

De Nysschen says Audi has not zeroed in on any specific facilities that might be available from U.S. auto makers looking to dump capacity, but adds “there are a lot of people knocking on our doors.”

Immediate pressure for North American capacity has lessened due to the slumping industry sales in the U.S. and other global markets and the easing of unfavorable exchange rates between the dollar and euro.

But de Nysschen says Audi’s view continues to be on the long term, and it ultimately will be necessary to build cars locally if the auto maker is to more than double its sales in the U.S. to 200,000 by 2018, a game plan it set in motion in 2007.

“Obviously there is no stronger impediment than immediate (lack of) need,” he says. “It’s a reality that when the company is at full capacity worldwide, it makes it easier to consider an additional factory in the U.S.

“On the other hand, the same argument holds true (as before). We ultimately want to sell the same number of cars here, and we also have to bring manufacturing to where the markets are.”

If Audi opts to piggyback on VW capacity in Tennessee, it likely would build a separate assembly line, but share administration and paint and body operations, de Nysschen says.

Volkswagen of America Inc. President and CEO Stefan Jacoby says putting Audi into the mix at Chattanooga could be done without much difficulty.

“With our engineering and platform strategy, it would be easy to adopt another brand there.”

Which vehicle to build also is part of the review under way.

VW will produce an all-new midsize sedan designed specifically for the U.S. at the Chattanooga facility in an effort to better meet consumer needs and make a bigger splash in the market, and Audi could go the same route.

“You need to have a car with a good volume – and it might be an all-new car,” de Nysschen says.

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